JWR Pte Ltd v Edmond Pereira Law Corp and another

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 16 July 2020
• Neutral Citation: [2020] SGCA 68
• Docket Number: Civil Appeal No 141 of 2019 and Summons No 23 of 2020
• Date: 16 July 2020
• Published date: 21 July 2020
• Plaintiff Counsel: Chong Siew Nyuk Josephine and Navin Kangatharan (Josephine Chong LLC)
• Defendant Counsel: Christopher Anand s/o Daniel and Harjean Kaur (Advocatus Law LLP)
• Court: Court of Appeal (Singapore)
• Hearing Date: 10 June 2020
• Subject Matter: Civil Procedure,Appeals,Amendment,Pleadings

Tay Yong Kwang JA (delivering the grounds of decision of the court):

The present appeal arose from a claim by the appellant, JWR Pte Ltd, against the respondents, its former solicitors, for the negligent conduct of an action in the High Court. The claim was dismissed in its entirety following a three-day trial. On appeal to this court, the appellant sought to abandon its case at trial and instead decided to rely on a single new allegation of negligence which was not raised at all during the trial. For this purpose, the appellant applied by way of CA/SUM 23/2020 (“SUM 23”) to seek leave from the Court of Appeal under O 57 r 9A(4)(b) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) to raise this new point on appeal and to amend its Statement of Claim (“SOC”) to plead the new allegation.

In our judgment, it was too late and totally unjust for the appellant to change its case in so fundamental a manner on appeal. We therefore dismissed SUM 23 and consequently, also the appeal. We now give our reasons for doing so.

Background facts

Dr Chen Walter Roland (“Dr Chen”) is currently the appellant’s sole shareholder and director.¹ According to Dr Chen, in 2006, one Lee Fichow Helen (“Helen Lee”) offered to appoint him the sole distributor of products (“Immunotec Products”) manufactured by a Canadian company, Immunotec Incorporated (“Immunotec Inc”) (see [3] of the judgment of the High Court (“GD”) at [2019] SGHC 266). Helen Lee allegedly told Dr Chen that she was a director of Immunotec Research (S) Pte Ltd (“IRS”) and that she was the sole distributor of Immunotec Products in Singapore. On 24 March 2006, the appellant was incorporated by Dr Chen and two other doctors.² On the same day, the appellant signed an agreement with IRS pursuant to which the appellant was appointed as the sole distributor of Immunotec Products in Singapore (“the IRS Distributorship Agreement”).

Sometime in July or August 2006, the appellant believed that there was another distributor of Immunotec Products in Singapore. However, it was assured by Helen Lee that it was the sole distributor here. Around this time, Helen Lee also informed Dr Chen that IRS had changed its name to United Yield International Pte Ltd (“UYI”) and that the distributorship agreement had to be changed accordingly.³ Accordingly, a new agreement was signed between the appellant and UYI on 18 August 2006 (“the UYI Distributorship Agreement”) (GD at [4]).

Dr Chen alleged that he subsequently discovered that IRS and UYI were in fact two separate companies and that there were other parallel importers in Singapore distributing Immunotec Products (GD at [5]). Further, the appellant was not recognised by Immunotec Inc as its sole distributor in Singapore because Helen Lee had not sought approval for this arrangement. However, after Dr Chen raised these matters to Helen Lee, UYI sent the appellant a notice on 18 October 2006 purporting to terminate the UYI Distributorship Agreement.

On 8 October 2012 (ten days short of six years from the date of UYI’s notice of termination), Dr Chen met Mr Edmond Pereira (the second respondent) and informed him that he wanted his law firm, Edmond Pereira Law Corporation (the first respondent), to commence legal proceedings against Helen Lee and UYI (GD at [6]). On 13 October 2012, Dr Chen wrote to the respondents giving his views on the dispute. On 15 October 2012, Dr Chen wrote again to the respondents instructing them to commence action against Helen Lee and UYI as soon as possible. The same day, the respondents advised him that proceedings against UYI would not be easy as it had been struck off the register of companies. The respondents also advised that the claim against Helen Lee was unlikely to succeed as the agreement was between the appellant and UYI. On 16 October 2012, Dr Chen replied maintaining that Helen Lee had acted in her personal capacity. The same day, the respondents advised that both IRS and UYI had been struck off the register of companies, that Helen Lee had signed the distributorship agreements in her capacity as a director of IRS and UYI respectively and that piercing the corporate veil would require fraud and/or deceit. The respondents’ opinion was that there was insufficient evidence to succeed against Helen Lee but Dr Chen was adamant that there was sufficient evidence.

In the morning of 17 October 2012, the second respondent met Dr Chen and advised him of the difficulties in his case and also the urgency to commence action before the limitation period set in. The second respondent also advised that UYI could not be sued as it had been struck off and that there was insufficient evidence to substantiate the appellant’s claim. However, Dr Chen instructed that an action be commenced against only Helen Lee so as to stop the claim from being time-barred. It was in these circumstances that the respondents commenced HC/S 896/2012 (“the Original Suit”) against Helen Lee that same evening. It was not disputed that there was urgency in filing the Original Suit as the action would become time-barred the following day (GD at [42]).

In April 2013, Helen Lee filed an application to strike out the appellant’s claim in the Original Suit (“the Striking Out Application”). The Striking Out Application was allowed by an Assistant Registrar (“AR”) who held that the claim against Helen Lee could not succeed because it would require the piercing of the corporate veil of IRS and/or UYI and this was not adequately pleaded. Moreover, there was no evidence to suggest that the corporate veil could be pierced.

Following the AR’s decision, the respondents recommended to the appellant not to appeal to a Judge of the High Court.⁴ As a result, no appeal was filed and the Original Suit remained struck out.

The trial in the High Court

In September 2015, the appellant commenced the present suit, HC/S 992/2015 (“the Negligence Suit”), against the respondents. The appellant’s pleaded claims against the respondents at the trial were encompassed in para 16 of the SOC which was in the following terms:⁵ 16. In breach of the said term and/or duty and negligently, [the respondents] failed to exercise any due care, skill or diligence in or about the prosecution of the said claim or proceedings.

Particulars

i. Failing to render appropriate legal advice to [the appellant]. ii. Advising that [the appellant] could not sue [IRS] and/or [UYI]. iii. Commencing proceeding in [the Original Suit] against the wrong party. iv. Failing to file an application under Section 340 of the Companies Act for an order declaring that [Helen Lee] be personally responsible, without any limitation of liability, for all or any of the debts or liabilities of [IRS] and [UYI]. v. Failing to include in the Statement of Claim sufficient particulars that would support [the appellant’s] claim against [Helen Lee]. vi. Failing to apply for leave to amend [the appellant’s] Statement of Claim to show that [the appellant] [has] a reasonable cause of action against [Helen Lee]. vii. Failing to consider and advise [the appellant] on Section 343 of the Companies Act. viii. Allowing [the appellant’s] claim in [the Original Suit] to be struck out. ix. Failing to provide competent representations to [the appellant] as required by the Legal Profession (Professional Conduct) Rules 1998 section 16, for a lawyer with insufficient knowledge, skill or experience to obtain such knowledge and skill through study and research or through the association with him of another lawyer of established competence in that field (i.e. company law).

Pursuant to the respondents’ request, the appellant served further and better particulars (“F&BP”) in relation to the SOC, including the above-mentioned para 16. The F&BP elaborated on the precise nature and scope of the appellant’s allegations of negligence against the respondents. The pertinent portions are the following: In respect of para 16(i) of the SOC, the respondents had sought particulars of the “appropriate legal advice” which they had allegedly failed to render. The F&BP stated that the respondent had failed to adequately advise the appellant on ss 340 and 343 of the Companies Act, to advise the appellant to commence proceedings against all three parties (Helen Lee, IRS and UYI) and to take the appropriate steps to lift the corporate veil of IRS and UYI or to show that they were Helen Lee’s alter egos.⁶ In respect of para 16(vi) of the SOC, the respondents had sought particulars of the alleged amendments to the Statement of Claim in the Original Suit which should have been applied for. The F&BP stated:⁷

Amendments which [the respondents] should have applied for includes the application for leave to amend the pleadings to include the lifting of the veil of incorporation, include the evidence to support the claim for the alter ego of [Helen Lee], and the applications under Company Act (Chapter 50) Sections 340 and 343, on the grounds of fraud and or fraudulent misrepresentations.

In respect of para 16(viii) of the SOC, the respondents had requested particulars on how they had allegedly allowed the appellant’s claim in the Original Suit to be struck out. The F&BP stated:⁸

[The respondents] failed to apply for the necessary leave to proceed with the claim against Helen Lee.

The appellant pleaded that by reason of the respondents’ negligence, it lost its prospects of recovering damages from Helen Lee for fraudulent misrepresentation in the Original Suit.⁹ The appellant also sought repayment of the legal fees charged by the respondents as well as the $3,500 paid by the appellant to Helen Lee for the costs of the Striking Out Application.

The trial proceeded on the basis of the appellant’s case as pleaded and particularised in the SOC and the F&BP. In the GD, the High Court Judge (“the Judge”) dealt with the appellant’s claims along these...